Pivot Factory Podcast - Episode 3 - Mike Halsall

Feb 11, 2019 11:38:08 AM / by Pivot Factory

Between erecting skyscrapers, airports, schools and hospitals, and building factories, dams and the ever-expanding web of roadways, tunnels and bridges interconnecting towns, cities and super-metropolises, construction is not just a big industry, it’s enormous. Yet if you look closely, its inner mechanics appear to be firmly stuck in its ways, and hasn’t undergone significant changes in years.

Industries of all kinds have been transformed in recent years due to investments in new and emerging technologies. So can construction be disrupted? On the outside it feels like the answer might be ‘no.’ But Mike Halsall is here to tell us different.

In this podcast episode, Halsall and host Michael Leadbetter, CEO and Founder of Pivot Factory, discuss the implications of large-scale construction projects and how the industry can be disrupted in the near future. Between AI, machine learning, 3D printing, and cryptocurrency, we might be on the verge of a dramatic shift in how construction projects are managed and performed.

Will Construction Evolve?

Since the height of the Great Recession, the construction industry has rebounded, in a big way. According to a PBS analysis in 2016, the industry contributed to 21-percent growth in U.S. gross domestic product since 2011. The construction boon is not only noticeable in the numbers. Cities across the United States are seeing their skies transformed, as glinty high-rises compete for prominence amid the birds and clouds. (See: Oklahoma City.)

While the revival of the industry is difficult to understate, there’s little to be said for the evolution of construction, which is virtually non-existent.

“Construction is a dreadful laggard in terms of technology adoption,” Halsall tells Leadbetter on the Pivot Factory Podcast. “There are lots of stories about things happening, but actually at ground-level, not a great deal is happening at all.”

Underscoring his point, Halsall cited a 2017 Economist article titled “The Construction Industry’s Productivity Problem.” It noted: “Since 1995 the global average value-added per hour has grown at around a quarter of the rate in manufacturing. According to McKinsey, a consultancy, no industry has done worse.”

“Things are especially dismal in rich countries,” the article continues. “In France and Italy productivity per hour has fallen by about a sixth. Germany and Japan have seen almost no growth. America is even worse: There, productivity in construction has plunged by half since the late 1960s. This is no trifling matter. The building trade is worth $10trn each year, or 13% of world output. If its productivity growth had matched that of manufacturing in the past 20 years, the world would be $1.6trn better off each year.”

To that point, Halsall says: “What we’re trying to do here in the UK is figure out—we’re not so much concerned about why that happened, we have a feeling about it, which is that supply chains are too long and too complicated. We’re trying to figure out how we make the industry more digital? And when you make an industry more digital, how do you then make it sort of what I would call virtualized, in the sense that you can recreate projects completely virtually, which means you can run projects in a virtual space time and time again before you actually build them.”

Solving Through Digitization

The veteran construction executive mentions a trio of emerging technologies that can potentially streamline operations and prevent projects from going over budget.

First, Building Information Modeling (BIM) can produce a digital representation of all aspects of a project. Secondly, Virtual Reality (VR) and Augmented Reality (AR) can provide ways of digitally analyzing a space, and machine-learning can make sense of all the data.

“That is the way that we can turn a complicated, badly communicated industry into one where we can put all the documents, all the ideas into one place and then share those collaboratively, either through visualization...or in a virtual space,” says Halsall.

We’d love to tell you how Artificial Intelligence will completely turn the industry on its head in 50 years, but you might want to tune in to the podcast instead for his eye-opening prediction, because words on page won’t do his pronouncement justice.

Construction Worldwide

Since construction is unhindered by borders, it’s important we take a wide view of the industry and account for its global reach. To do that, according to Halsall, it’s helpful to have even a cursory understanding of political goings on, as the ebb and flow of the global economy can indirectly affect a project a world away.

“Today we call it ‘Geopolitics.’ But in the old days it was just a question of understanding the counterparties to a contract if they were international people,” Halsall says.   
This mostly comes into play when a large-scale project is involved. In Halsall’s case, he had to coordinate with his French counterparts during the building of the Channel Tunnel, which connects the United Kingdom with Northern France.“The ability to read the world, make use of that, and then apply it to their lives” is extremely beneficial, Halsall notes.

The Takeaway

Construction is surprisingly ineffective right now. But there are ways to fix it. If implemented the right way, emerging technologies can be a game-changer for this industry. With the massive improvements in Virtual Reality, machine learning, and 3D printing, it seems construction will be much more amenable to adopting these new tools in the years to come.

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The Pivot Factory Podcast is a Morey Creative Studios production.

The Pivot Factory Podcast is hosted by Michael Leadbetter, and engineered and produced by Michael Conforti, Rashed Mian and Christopher Twarowski. Jed Morey is the executive producer.